North American Network Operators Group

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Re: CIDR Report

  • From: Valdis.Kletnieks
  • Date: Wed May 17 10:20:49 2000

On Wed, 17 May 2000 02:04:55 PDT, "Roeland Meyer (E-mail)" said:
> >> > [email protected] wrote:
> > > Sure, *any* good router vendor can build a router that can
> > handle 100 million
> > > routing table entries.

> I tend to agree, the numbers I threw around earleir were strictly
> first-order approximations for raw sizes. Second-order would include
> performance issues and algorithm requirements. I see that Vadim ihas
> already arrived there.

OK.. I meant the ability to *store* 100M table entries.  Flapping is
another story, which just aggrivates the cost problem ;)

> Why $2M? From price ranges in the current market, I would think that
> they'd have to hit under $200K. Actually, I would have a difficult time
> convincing clients of anything over an additional $60K. This gets back
> to my earlier question, how many backbone routers are there (nearest
> order of magnitude should suffice here)?

Exactly.  We can all *SAY* we want features X, Y, and Z, but who will
actually *buy* them if they cost more?

I tossed out $2M as a straw man - it just seemed like a good "you could build
almost anything for under that price, but nobody would buy".  If the added
cost is $50K per box, that increases the number of boxes you can sell, but..

The curve for price versus number sold is probably a hyperbolic (even
if my old economics texts drew it as a straight line ;) , whose exact
shape will depend *very* heavily on just how much price elasticity
there is.  And most organizations being what they are, it probably
will be pretty flabby until we get to the "You need this level of
router or you're screwed" state of affairs, at which point there will
be a mad rush to buy them. ;)

> Typical rough market guidelines are that development cost must be less
> than 1% of total market size or the project is a non-starter,
> business-wise. Typical costs for this sort of project are $1M to $3M,
> over 8 months, with COGm at about $50 (relative to a minimum Number of
> Goods sold [NOGs] and assuming that it is technically feasible).

Hmm. 1%?  Based on what I've seen for cost estimates for other high-ticket
low-volume stuff (mostly mainframe-class computers, etc) I would have guessed
10%.  In any case, I think the point is made that we can talk all we want
about how we want <insert router vendor name here> to provide a truly high-end
router that solves everything, but the reality of the cost pressure does
need to be considered....

				Valdis Kletnieks
				Operating Systems Analyst
				Virginia Tech